FinTech Advantage brings the industry to banks’ doorsteps

Alex Lopatine may be with a new company but his mission remains the same.

Mr. Lopatine was recently hired by Paladin fs, an IT contract negotiating and fin-tech advising firm, to be the managing director of FinTech Advantage, its new division focusing on assisting banks with adding the financial technology they need to remain competitive in a changing marketplace. He will work directly with banks and credit unions to determine their needs and select the right technology.

It’s an industry Alex Lopatine knows well. He founded NYMBUS, a cloud-based processing platform and API-driven core banking technology company. It was while with NYMBUS that he met Paladin fs CEO Aaron Silva.

“We shared the same passion for community banking and credit union industries,” Mr. Lopatine said. “Our mission is to help decrease their dependency on legacy core providers.”

Once Mr. Lopatine moved on from NYMBUS it was time for him and Mr. Silva to develop FinTech Advantage, which helps banks negotiate important money-saving clauses in their contracts.

Alex Lopatine

It’s an important role, because it makes it easier for smaller institutions with little negotiating power to realize the benefits that someone like FinTech Advantage, who works across the industry with multiple providers, has. Perhaps an institution acting on its own negotiates a discount off new software and think they’ve done well for themselves. But they’re locked in for seven years. That’s seven years in a rapidly changing industry where the technology might be obsolete after three.

That better be a hell of a discount.

“They (may) get it cheaper, but they’re not opening their eyes to another choice,” Mr. Lopatine said. “It’s harder and a more difficult choice to research the stack and be able to access the ecosystem of collaborative fin-tech products, and know how to integrate those products into the stack.”

FinTech Advantage will help negotiate that contract with the suppliers and then consult on integrating that technology so the institution can remain competitive, Mr. Lopatine said.

Back to the poor fellow who was initially happy with the discount he negotiated over a seven-year contract. A couple of years in, he attends a few conferences and learns of some new technologies that can really drive business. But then he reads the fine print and sees an early termination fee of up to 80 per cent. So much for the discount.

There’s a recipe for falling behind in the digital age.

“Everyone expects a bank to be fully digital,” Mr. Lopatine said. “Even if you wait until the end of the contract it could take another two years after your decision for the technology to be fully integrated. That seven years becomes nine.

“Think of the technology that’s been developed over the last nine years.”

It’s like thinking you got a deal on that 1986 sedan. Sure it was cheap but you’re not driving a Tesla, Mr. Lopatine said.

When you have a direct relationship with your clients and good contacts across the fin-tech industry, you are well-positioned to help community banks and credit unions open their minds to options they may not be aware of that are good choices for them, Mr. Lopatine explained.

“If a bank wants a non-innovator to help them provide a modern digital user experience it won’t happen,” Mr. Lopatine said. “Their goal is to nickel and dime them into perpetuity.”

The best time to revisit your technology strategy is 18-30 months before your current agreements expire, Mr. Lopatine said. That allows for plenty of time to research technologies supporting specific areas and to determine how they can best be fit into the existing stack.

“We create a roadmap of how to stay relevant in the existing marketplace,” Mr. Lopatine said. “We map out the architecture of the whole stack and introduce them to the right fin-tech companies that can replace the service or channel currently provided by legacy firms.”

Those smaller institutions benefit from the relationships the FinTech Advantage team have developed over decades in the industry, and are able to provide the digital customer experience their customers expect, Mr. Lopatine said.

A two-time LendIt Journalist of the Year nominee and winner in 2018, Tony has written more than 2,000 original articles on the blockchain, peer-to-peer lending, crowdfunding and emerging technologies over the past seven years, making him one of the senior writers in the alt-fi sector.

"The evolution of the crowdfunding and peer-to-peer lending scenes is absolutely fascinating to chronicle. It is a joy to be around people with such passion and vision."